Specialty chemicals

Branding and pricing strategy for a new product

Starting Point

Our client has developed a new dye product for use on textile. Until now there has been little or no demand for these dyed textiles, although recent developments promise a large market potential for such a product. Because of the novelty of the product and the competitive situation, there is a good chance for a successful market penetration. A strategic brand and pricing policy is a prerequisite for a lasting goodwill advantage of the new developed product.

Goal of the Project

The strategic objective of the project is to develop a branding and pricing strategy for the product. Crucial for the development is the value or utility that the new product offers to all partners/customers in the value chain. Therefore these potential partners were included in the study.

Procedure

• Development and pretesting of a questionnaire
• Explorative pretests, expert-survey and workshops with our client
• Sensitivity regarding the new product, market analysis
• Explorative pretests, expert-survey and workshops with our client
• Strategic requirements
• Analysis of the results, determination of the price premium. Discussions/workshops with our client.

Branding and pricing recommendations

Results

Strategic requirements:

• The brand name will be accepted, but explains the function insufficiently. The logo has to be modified and completed with a slogan.
• The end-customers and the experts are willing to pay a price premium for the new product. A main requirement for introducing the brand is fulfilled.
• The new product would fit in the marketing strategy of most experts, who recommend a combination of the new brand with brand name clothing. In the short-term, a cooperation with a strong brand name clothing should be aimed to take advantage of the high awareness and recognition.

Recommendations:

• The co-branding strategy is the best solution for the new product of our client. Finding the right partner is decisive for the success of the co-branding strategy. Potential partners are already identified and evaluated.
• The currently existing organization of the new-product-profit center is insufficient for a successful marketing program.
• Finding the right partner is decisive for the success of the co-branding strategy.
• Our client must exploit the determined price premium. It is recommended to sell the label of the new brand to retailers/garment makers at the determined price level. The higher the partner is positioned in the value chain, the higher is the possible price premium for our client.
• A combination of brand name, logo and slogan should be use for the market introduction.

Implications:

• Implementation of Industry Marketing Centers (IMC) that are responsible for providing a variety of forms of the product and technical support systems to the target industries. The IMCs are also responsible for the market intelligence.
• Establishment of production and technology centers that are responsible for providing the product, product and process development, purchasing and product management.
• Establishment of a cross-divisional committee to organize the product bundling.

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